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Sales (9,600 units at $225 each) Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Income HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 1. Amount of sales 2. Margin of safety $ 2,160,000 1,728,000 432,000 324,000 $ 108,000 1. Assume Hudson has a target income of $162.000, What amount of sales dollars is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)

Sales (9,600 units at $225 each) Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Income HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 1. Amount of sales 2. Margin of safety $ 2,160,000 1,728,000 432,000 324,000 $ 108,000 1. Assume Hudson has a target income of $162.000, What amount of sales dollars is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hudson Company reports the following contribution margin income statement HUDSON COMPANY Contribution Margin Incone Statement For Year Ended December 31 Sales (9,600 units at $225 each) Variable costs (9,600 units at $180 each) Contribution margini Fixed costs Income 1. Amount of sales 2. Margin of safety $ 2,160,000 1,728,000 432,000 324,000 $ 108,000 1. Assume Hudson has a target income of $162.000. What amount of sales dollars is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)
Transcribed Image Text:Hudson Company reports the following contribution margin income statement HUDSON COMPANY Contribution Margin Incone Statement For Year Ended December 31 Sales (9,600 units at $225 each) Variable costs (9,600 units at $180 each) Contribution margini Fixed costs Income 1. Amount of sales 2. Margin of safety $ 2,160,000 1,728,000 432,000 324,000 $ 108,000 1. Assume Hudson has a target income of $162.000. What amount of sales dollars is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)
Handy Home sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $200 and of each door is $500. The variable cost of each window is $125 and of each door is $350. Fixed costs are $720,000. (1) Compute the weighted average contribution margin. Sales mix Windows Doors Contribution margin Weighted average contribution margin (2) Compute the break even point in units using the weighted average contribution margin. Numerator: 1 Denominator: 1 Windows Doors Total (3) Compute the number of units of each product that will be sold at the break-even point. Sales mix Number of units to break even Total per unit Break Even Units Break Even Units Unit sales at break-even point
Transcribed Image Text:Handy Home sells windows (80% of sales) and doors (20% of sales). The selling price of each window is $200 and of each door is $500. The variable cost of each window is $125 and of each door is $350. Fixed costs are $720,000. (1) Compute the weighted average contribution margin. Sales mix Windows Doors Contribution margin Weighted average contribution margin (2) Compute the break even point in units using the weighted average contribution margin. Numerator: 1 Denominator: 1 Windows Doors Total (3) Compute the number of units of each product that will be sold at the break-even point. Sales mix Number of units to break even Total per unit Break Even Units Break Even Units Unit sales at break-even point
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